Stocks Ringgit Slide As Anwar Signals Push To Oust Pm

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Malaysia's ringgit fell to a near two-week low on Wednesday after opposition leader Anwar Ibrahim claimed he had a majority in parliament, leading losses for Asian currencies in a week dominated by a stronger dollar and concerns over a coronavirus-driven downturn.
With most of the region's stock and currency markets lower, the Thai baht also lost around half a percent in the run-up to a central bank meeting that kept interest rates at record lows and marginally raised its forecast for 2020 gross domestic product.
An Anwar government would likely be seen as a positive by financial investors in Malaysia but in the short-term, he faces several barriers to oust Prime Minister Muhyiddin Yassin after just seven months in charge.
That, and the potential for another election, had analysts focussing chiefly on the prospect of more political uncertainty that could also threaten government efforts to dig the economy out of a coronavirus-driven recession.
"Markets are prone to political dynamics, and the reflexive ringgit sell-off following the news is neither alarming nor unexpected," said Wei-Liang Chang, a macro strategist at DBS Bank.
"The longer-term consequences for the economy are still too early to judge without political clarity."
The ringgit tumbled up to 0.8%.
Malaysia's benchmark stock index also led losses among Asian equity markets.
A steady uptick in coronavirus cases globally and impact on economic growth have continued to exert pressure across Asian markets this week.
The Indonesian rupiah dropped 0.3% in tandem with peers while local stocks slid as much as 1.2% and were on course to fall for a third straight session.
Despite the government now expecting a steeper economic contraction in fiscal 2020, analysts see very little scope of any monetary policy changes from the central bank anytime soon.
"Bank Indonesia is now driven only by currency movement and hence weakening currency is expected to deter any further rate cuts," Kunal Kundu, India economist with Societe Generale said. - Reuters

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